Upstart (UPST) is one of the best stocks on Friday, up more than 40% at last check, after the artificial intelligence (AI) lending marketplace beat top- and bottom-line expectations for its third quarter and provided a stronger-than-anticipated outlook for its fourth quarter.
In the three months ended September 30, Upstart's revenue increased 20.5% year over year to $162.1 million, boosted by a 30% pop in transaction volume to $1.6 billion. Meanwhile, its net loss widened to 6 cents per share from 5 cents per share in the year-ago period.
"With 43% sequential growth in lending volume and a return to positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], we continue to strengthen Upstart's position as the fintech leader in artificial intelligence," said Upstart CEO Dave Girouard in a statement. "Even without a significant boost from the macroeconomy, we're back in growth model."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results easily topped analysts' expectations. Wall Street was anticipating revenue of $150.2 million and a net loss of 15 cents per share, according to Yahoo Finance.
For the fourth quarter, Upstart expects to achieve revenue of approximately $180 million, well ahead of the $162.3 million in revenue analysts are anticipating.
"We're hopeful that we'll see macroeconomic wins in the quarters to come, but we're not waiting around for them," Girouard said. "Upstart's mission is simply to improve access to credit, and our strategies to accomplish this goal is to provide the best rates and best process to everybody."
Is Upstart stock a buy, sell or hold?
With Friday's post-earnings surge, Upstart is now up more than 95% for the year to date, but Wall Street remains on the sidelines when it comes to the financial stock.
According to S&P Global Market Intelligence, the average analyst target price for UPST stock is $40.19, representing a substantial discount to the current share price of nearly $80. Meanwhile, the consensus recommendation is Hold.
Financial services firm Needham is one of those with a Hold rating on the mid-cap stock.
"While we are constructive on UPST's growth trajectory over the medium term, we believe that it is still relatively early on in the days of a growth recovery," says Needham analyst Kyle Peterson. "While we expect there to be opportunities for growth investors to add UPST to their portfolios in the event of a pullback in the shares and/or increased conviction that estimates will continue to climb higher, we view the risk-reward as neutral at the current time."
Related Content
-
Investors Buy the Nasdaq's Big Dip: Stock Market TodayStocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
What to Know About Portable MortgagesA closer look at how portable mortgages would work, who might benefit and why the concept is gaining attention amid high rates and limited supply.
-
Investors Buy the Nasdaq's Big Dip: Stock Market Today
Stocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
Here's How to Plan This Year's Roth Conversion, From a Wealth ManagerWhile time is running out to make Roth conversions before the end of the taxable year, consider taking your time and developing a long-term strategy.
-
Four Times You Need a Second Opinion on Your Financial PlanIs your financial plan fit for purpose — or is your adviser peddling an outdated strategy? When you see these red flags, it's time for a second opinion.Evan
-
'But It's Not My Fault!': Your Insurance Company Absolutely Will Blame You in These Five ScenariosInsurance companies care about 'fault' in more ways than you think — from payment mishaps to your neighbor's landscaping — so it's on you to manage the risks.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
5 Core Stocks Every Investor Should Own In 2026 and BeyondCore stocks are solid, long-term investments that provide stable returns and steady growth within your portfolio. Here are five we like.
-
How to Calm Your Retirement Nerves When It's Time to Shift from Savings Mode to Spending ModeTransitioning from saving to spending in retirement can be tricky, but devising a strategic plan can help ensure a smooth and worry-free retirement.
-
Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who KnowsFamilies need to prepare heirs through communication and financial know-how, or all that money could end up causing confusion, conflict and costly mistakes.
